Takeda, a Japanese pharmaceutical giant, purchased Millennium Pharmaceuticals this morning for $8.8B or $25.00/share which works out to be an $8.61/share, 53% premium over Millennium’s share price of $16.38 yesterday. The move by Takeda comes less than three months after a chief Japanese rival firm, Eisai, purchased US based MGI Pharma and it’s strong cancer franchise for $3.6B ($41/share, a 23% premium).
Millennium Pharmaceuticals has turned its fortunes around lately after a depressing start with its multiple myeloma (MM) drug Velcade (a reversible ubiquitin proteasome inhibitor) due to competition from Celgene and its drug Revlimid. Coincidently, the stock is up 53% since October ‘07. Velcade ($560M in sales for ‘07 ) is approved for MM as a third and second-line therapy with sNDA on the table at the FDA with a decision for first-line treatment coming as soon as mid-08.
Takeda thinks it can recoup the $8.8B in cold, hard cash it is laying out for Millennium by 2010, not including transaction costs. I think this is a crap-ton of money for a second-tier MM drug and an early stage clinical pipeline. In December 2007, Bank of America analysts felt that Velcade would remain secondary to key competitor Revlimid due to Revlimid’s superior safety profile, oral dosing convenience and comparable efficacy. Wachovia analysts, also in December 2007, cited that Velcade’s infusion frequency and peripheral neuropathy associated with use would limit aggressive growth.
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Eben is a highly caffeinated business development associate at a small, cash sensitive pharmaceutical company somewhere in Massachusetts. He enjoys cliche-less banter, compartmentalization, non-equilibrium thermodynamics and NPV analysis. Agree or disagree with what he's posted? He encourages comments.
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May 27, 2008 at 9:25 am
[...] deal at an interesting time for Takeda. They have been on a shopping spree recently (see: Millennium) tying to ...